All Forum Posts by: Tom Wingert

Hi @Rohan J.

I'm a late to this thread but I found yours while looking for some info of my own.

Like you, I'm from SoCal, this was my first out-of-state property, and I was attracted to the low cost-of-entry in Indy. Plus the fact the numbers around here are terribad.

Around the end of 2013, I picked up a 4/2 SFH through a turn-key provider. My experience has been ok. As far as numbers, I got about 11.4% of the purchase price back in rents (after expenses, before taxes), which, I think, is not too bad. However, the PM (also the seller) has my red flags going off like crazy; especially lately.

The property is Section 8 and the most recent incident involved the PMs getting me a vague list of needed repairs from the annual Section 8 inspection with less than a week to act on it (later, I got the exact list of the needed repairs and most of them were tenant-caused). They wanted $810 for their "in-house" contractors to do the work. Leaving out a lot of the back and forth, I decided to go ahead. Fast forward 3 months, I get an invoice from them for well over $1,600 for those repairs. I'm still working with them and all, but I'm not exactly stoked as of right now. What bugs me the most is that they don't seem willing to provide legitimate documentation of the wok they bill me for. My understanding is that they work mainly with out-of-state investors, and cater to that clientele, so I would think they could do it if they wanted to.

As far as the area, mine is a fair bit east of your zone #5. One thing I don't like about Indy is the high crime rate - but I knew about that going in - and I haven't run into any issues yet. As others have said, a matter of a few blocks can make all the difference.

I would recommend going to see it first-hand. Having been there, I was able to get a much better feel for the neighborhood compared to the Google street view. It really is a nice looking little neighborhood.

Feel free to PM if you have more questions, Rohan.

Also, since I very well may need to replace my PMs in the near future, could I get some recommendations from those earlier in thisthread?

@Rodney Kuhl @Shawn Holsapple @Jynell Berkshire @Lee Smith @AnyonelseImissed

If you have PMs you recommend (or are a PM yourself), could you please send me a message? I'm very interested in lining up some good options. The place currently has a reasonably nice Section 8 tenant in place and I'm open to continuing that or going another direction when this tenant moves out.

Hi @David Beard,

Thank you for your reply.

Yes, you got it right. It's mostly a rental area. It's Indy so there's little chance for appreciation but the cash flow looks reasonable to me and that's my main interest right now.

I was told that appraisals are coming in low all over the place and one of the reasons that's happening here is that short sales and foreclosures are included and cash deals never even hit the MLS.

How bad is it when properties are in mostly-rental areas?

Hello BPers,

Please let me know your thoughts about the following deal:

East Indianapolis

$69,000

4 bed 1.5 bath. Tri-level(?) with the largest bedroom and a half bath in a daylight basement. The area below the grade is finished and there are egress windows.

"Turnkey" property and I met the property manager.

Currently rented to a Section 8 tenant paying $850/month.

I did visit the property and it is in pretty good shape and there were lots of repairs made (about $30,000 based on the scope of work they sent).

They had a "front-end investor" for this one who put up the initial cash and called many of the shots. They said their last appraisal came in at $57,000 and that caused the last deal to fall through. For that reason, they said the seller wasn't sure if he wanted to sell, and had me wait a couple days for a decision to go ahead.

The appraisal I got came in at $52,000. However, using the current rent of $850 for the "Income Approach" it was around $62,000.

Please let me know what you think of this appraisal and the deal in general. I've been told that appraisals are coming in low all over the place so that's kind of standard but I'd like to see something more on that.

Looking forward to your thoughts!

Hi Mehran Kamari, thanks sharing your thoughts.

That is interesting that you went the SFH route and got roommates. I've always considered that idea and wondered if it would work for me.

My questions is: if you were just starting off, right now, would you do the same or would you go a different way?

Also, what markets out of state do you currently invest in?

That's an awesome way to put it, something of a "pay it forward" mentality and I'll be only too happy to do so (and I definitely do plan to stick around - good read!). Who would have thought a website called biggerpockets.com would actually be full of philanthropists!

Thanks again, Mehran, and I'll see you around!

Hmmm, Jeff Brown, that is pretty unclear... So you're saying I should DEFINITELY invest all my money in LA?
LOL!
(And I actually did laugh out loud at your reply)

Really, though, I see you have a strong opinion on this and, like Karen Margrave asked a few posts later, I'd be very interested in an expansion on your perspective. If we're talking downtown LA, there's no way. If we're talking the greater LA area, I can see that the numbers are far less than ideal but I know some find success here too.

Also interested in why it makes for such a bad long term bet. Not to argue, but just to see another perspective because most people I've heard say appreciation in CA is likely, based on the prices right now.

I think I read elsewhere that you recommend Texas markets. Could you tell me more about that and any other markets you think are great picks right now?

Thanks for your reply, Jeff!

Hi Karen Margrave, if anything, fashionably late. More like right on time.

I kind of like breaking rules so, appreciation aside, is there a percentage that works for this area still keeping expenses in mind? Or is it really all about the appreciation potential and that we're still toward the lower part of the cycle?

Your question about a bad scene in Chicago (i.e. not knowing the specific areas) is probably my biggest sticking point when it comes to out of state investing. I've been hearing that Chicago, Detroit, and other places are notoriously bad right now but I also know they're big places kind of like LA. I was in Chicago a few years ago around Wrigley and it was fine so, unless things have changed drastically, my guess is it really depends on what part.

Even so, I was going to be stuck on that obstacle for a while, but Brandon Turner gave me a great idea of asking other BP members who are local. As long as they don't have any vested interest, could you see that as a viable way to research an area?

I love your idea of a post about specific properties in specific markets - that would be great to see right now.

Thanks again for your feedback, Karen; I appreciate your perspective and you have a great day, too!

Brandon Turner, great advice and thank you for those tags!

I think what you said is HUGE: talking with lots of people doing it who have nothing to gain. Sales is always a little strange because the person selling has that vested interest in you buying so it's hard for there not to be at least some conflict of interest.

You also jumped me ahead a few big steps because I was thinking about the friends I have across the US and how lucky I'd have to be to find someone dependable that lives within driving distance of a property I might buy. You gave me such a great idea in asking other BP members, and that's a huge piece of the puzzle I was missing!

It's also really encouraging to hear that BP was a big part of your success and I'll plan to take your advice and stay connected.

Colleague request incoming and thanks again for those tags (already got some great feedback from the Cali crew).

Hi Scott Meredith, thanks for your response. While I always liked the idea of flipping, I never ended up with much experience on that side of things. I'm all for learning so if you want some semi-useless volunteer work on a Saturday in exchange for increasing my skillset, let me know!

What markets are you looking at, Scott?
I'd be interested because, while I'm not doing flips/rehabs right now, my plan is to use my full-time job to fuel my investments.

Btw, I saw a place in Long Beach that sold for $200k LAST MONTH, was nicely rehabbed, and is now listed at $330k this month. I wonder if it'll sell for that... What would be your bet?

Nice - she responded!

Yeah, you called it, that property is in a "marginal" area of Long Beach. I could hang, no problem, but it's definitely hood-adjacent if not just hood.

I'm especially interested in the markets you think are good for starting off, Ali. Thanks for the tip about Chicago.

Haha - well, it's always easier to get a read on someone who shares a similar perspective. And, yes, I am single at the moment and you're really friggin' cute. But you know it could never work out between us, right? I mean, unless we're more different than I think, we'd be endlessly battling over who's in charge. ALSO kidding!
; )

I'd bet we could be great friends.
If it were winter now, I'd say Mammoth lift tickets are on me if I get to pick your brain in return. Since it's almost summer now... hmm, Six Flags? Wakeboarding?

Thank you for your encouragement, Marco.

The "paralysis of analysis" (as I'd usually heard it before BP)... that one always makes me chuckle; I always imagine a supernerd like Professor Frink on the Simpsons, but I understand that many people will fall into that.

For me, analysis emboldens me to make good decisions but, as I've been telling those around me lately who are surprised I backed out of the local deals above: a decision *against* is still an action.

Lots of good ideas here and I see you run a turnkey business so I'd be open to getting more information by PM.

Since I always appreciate when people are upfront with me, I'll try to do the same. What I look for when deciding whether to work with someone in things like this is lots of information, the drier the better, and then I'll make my own decisions.

That works for me and I like to think it makes it pretty easy on the other person, too. Once I'm given all the information, I don't need much handholding; I'll figure it out. If it's the standard marketing-type stuff, sure I'll check it out but it's probably not going to have much impact on me.

I understand that things move quickly so I may miss out on some good deals but I need to get started looking at other markets besides SoCal. Please feel welcome to send me or direct me to whatever information you think would be good for someone in my position and I'll happily consume it all.

Thanks again, Marco!